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Canadian financial services firms struggle with innovation: PwC


December 3, 2013   by Canadian Underwriter


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The financial services industry in Canada is struggling with innovation, especially compared with the industry globally, with 28% of board-level respondents in a recent survey saying it’s “very challenging to build an innovative culture.”

Innovation is viewed as an important driver of success by 83% of banks, insurers, wealth managers and other financial services leaders, according to the Global Innovation Survey from PwC.

Canada is particularly behind the global trend in innovation, the report suggests.

Overall, survey respondents indicated that retaining talent (22%), measuring innovation success (17%) and developing and implementing support structures that drive and sustain innovation initiatives (28%) are the biggest challenges.

“The challenges faced by Canadian FIs in driving innovation are grounded in culture, organization structure and process-related issues,” John MacKinlay, financial services consulting and deals leader at PwC commented in a statement on the survey findings.

“These issues can be addressed in part by doing three things: firstly, clearly defining what opportunities and benefits are achieved by driving innovation into the organization, secondly, taking a long-term view to implementing the vision as innovation does not materialize overnight, and finally, building an innovation support framework that turns ideas into reality.”

In Canada, executives report being focused on near-term innovations in technology (33%) and systems/process improvements (22%). PwC attributes that in part to innovation being driven out of the IT function, but notes that financial institutions may be missing critical opportunities in other areas, such as customer experience, business model and product innovation.

Most financial institutions here also reported not having formal structures in place to drive and sustain innovation, whereas 79% of “top performers” in the survey indicated having a well-defined strategy.

“While technology advancements are certainly important, there’s considerable competition in Canada to create the ultimate customer experience,” Karen Forward, director of financial services at PwC noted in the firm’s statement.

“That’s why it’s critical for companies to make innovation a part of their fabric and to consider ways to help teams across the organization shape ideas and implement them.”

“Tools such as social technologies have given rise to crowdsourcing to develop new products and organizations need to remember that front line employees are key idea generators as they see opportunities every day to drive a more personal level of customer service,” she added.


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